The Airports Council International, Europe (ACI-Europe) reports that political delays in granting entry of Low-Cost Carriers on long-haul Transatlantic routes stifle growth opportunities at Europe’s regional airports.
ACI Europe reports some recent improvements in the performance of Europe’s regional airports, but even in the good news there are signs of ongoing difficulties.
- Regional airports, serving less than 5 million passengers per year saw a rise in passenger traffic of 8.9% in Q1 of this year.
- Non-capital airports of the same size enjoyed a rise of 7.6% in Q1.
- That brings growth at these airports in line with the industry average of 7.8%.
- Cumulatively, however, regional airports have been at a disadvantage.
- Passenger traffic at Europe’s airports grew by 25% between 2008 and 2015, but regional airports grew by only 14.4% and non-capital airports serving fewer than 5 million passengers grew by only 9.2%.
- The number of regional airports which are unprofitable has been reduced from 66% in 2013 to 56% in the latest report by the Association, but 77% of the smallest regional airports, with less than 1 million passengers, are still losing money.
This puts rural Europe at a connectivity disadvantage, always at risk of losing viable air service.
Some European countries like Portugal, Spain, Lithuania, and more recently Greece are addressing the dilemma of maintaining profitable connectivity by putting regional airports under the management of airport management groups. Aena, in Spain, is an example.
Still, economic conditions at Europe’s regional airports are a mixed bag of progress, profits, challenges and losses.
“Since last year, regional airports have finally been catching up with their larger peers and are now seeing more dynamic passenger growth. Alongside generally improved macro-economic conditions in Europe, a big chunk of those gains is down to efforts by airports to remain competitive and secure air services beyond the usual peak seasons. It is also due to demand shifting from traditional North African destinations to European ones in response to security concerns. Yet, if there are winners, there are also losers — no two markets look alike and airport competition is fiercer than ever, with airlines essentially dictating the terms under which they decide to operate,” explains Olivier Jankovec, Director General, ACI EUROPE.
Low-Cost Airlines have been a strong source of traffic and income for Europe’s regional airports. But, as LCCs move towards higher-yield, higher-passenger airports, “their approach to regional airports [is] becoming even more opportunistic,” the Association states.
- The number of LCC bases at Europe’s regional airports today (93 bases at 78 airports) is lower than in 2014 (98 bases at 82 airports).
Hope in the Long-Haul
The Association believes LCC long-haul operations could create niche opportunities for the larger of Europe’s regional airports. ACI-Europe believes long-haul LCC service would boost regional air connectivity and drive local economic development.
“The example of Norwegian Airlines’ plan to open direct connections from Cork airport to the US is a case in point. However, it is worrying that such promising development is held hostage by political interference—with the US Government so far not complying with the terms of the 2007 EU-US Aviation Agreement,” ACI-Europe states.
Beyond the delays granting Norwegian Air International rights to operate, other regulatory complications make difficult conditions at Europe’s regional airports worse.
“With trading conditions for aviation overall being the best in years, the main challenge actually remains the policy and regulatory environment,” Jankovec says.
“We need regulations that better reflect and support market dynamics. This is the case in particular for airport charges—which generally continue to be regulated with a rear-view, as if airports were still monopolists. We also need regulations that put consumers at the forefront and boost air connectivity. This means ignoring protectionist forces and overcoming resistance to change by moving forward on open skies. This also means coming to terms with the Single European Sky and doing away with aviation taxes.”
Jankovec adds: ”The European Commission’s Aviation Strategy goes in these directions, connecting the dots between aviation and the economy—but ultimately, it needs meaningful support and alignment from Member States if it is to have real impact.”
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